Turning Around a Failing Business Unit
The Challenge
Tower Strategy Group's client, a FORTUNE 500 multinational in the industrial and business solutions market possessed a division that substantially underperformed relative to internal expectations and its market potential. Having once been the market share leader within its segments, heightened competition from lower cost and increasingly sophisticated Asian players, major investments from legacy competitors to redefine their own business models and changing customer expectations and decision-drivers had fundamentally changed the rules of the game within the client's core markets. As a result, though the client's business continued to grow at a single-digit clip, its growth rates lagged that of key competitors and the market as a whole. The client believed that without substantial corrective action, division performance would continue to deteriorate rapidly.
Concerned about their eroding share and increased margin pressure, the client turned to Tower Strategy to identify the key steps necessary to help this division to regain market-leading growth rates while identifying key means to differentiate and occupy a premium position within the market itself.
The Solution
Tower Strategy Group worked with the client's divisional leadership to:
Define how customer requirements and decision processes were shifting within the market
Measure how well the client was positioned relative to these emerging segments and the resulting impact on its position within the market
Map how the value chain within the client's industry was adapting and changing in order to more effectively meet the needs of a fast-changing market
Define the specific aspects of the client's business model and product, channel, sales and marketing strategies that were inhibiting its ability to compete
Evaluate whether the clients brand retained enough equity to serve as a basis / platform for a pivot away from its historical model
Establish a vision, set of objectives and strategy for not just adapting to the changing market but for reestablishing a leading position within it
Impact
We identified that the client’s legacy business, due to trends towards higher efficiency and green products would cease to exist within 10 years. And defined how the client could more fully harvest its core business in the short- and medium-term, using that as a platform to fund a more substantial business model redesign in the long-term. With the end result being a substantially expanded footprint across the value chain, one that was necessary to avoid becoming a fully commoditized hardware / equipment-only player. And one that would allow access to more stable and higher margin revenue streams and to a more sustainable long-term position within the market.
